I got really curious and did some web surfing yesterday. I did find a link that said the average household spends between 2.5% and 4.9% on clothing each year. (And spends closer to 13% on transportation - wow!).
And then I was watching Wife Swap and there was a wife on there who said she spends $4000 a week for clothing!!! Her husband is a millionaire. But can you imagine.... ??? Wow. Considering WNTW gives you $5000 for an entire wardrobe makeover, that is something to boggle over, huh?
The general advice was to use this "average" as a guideline only - that it's tough to compare to others, because everyone's circumstances are different. The only thing you might be able to deduce is that at a bare minimum you would need 2.5% to replenish necessities like underwear, shoes, etc.
The best way to figure out what's right for your circumstance is to first budget everything else - especially savings. Do you have 6-9 months savings should you lose your job right now? That should be priority number one. Do you have any debt? Paying it off should be priority too.
If you have no debt and you have a decent amount of savings, then the question becomes - is there anything else you would want to spend your discretionary money on?
Do you want to save for any big-ticket items, such as a house, new furniture, renovation, going back to college, a trip around the world, etc, etc... ?
And/or would you get more daily pleasure spending your money on a hobby, entertainment, eating out more often, buying more books or music, driving a newer car, etc?
In other words, is your clothing spending sacrificing something else you could be spending on instead?
Everyone's answer is going to be different. I long ago realized that it gives me much more pleasure to have a nice wardrobe and go on frequent trips, versus driving a nicer car or having newer furniture. Those things just don't really interest me. So that is where my discretionary budget goes - to the things that do interest me.
Of course, if you are married this has to be a negotiation with your spouse, too. Our priorities are eating out, travel, entertainment, clothes for me, gardening supplies for DH. These are the line items in our discretionary budget.
Now, if you are finding you spend but only wear 20%, you need to ask why that is. Is it because you have no plan so you spend on the wrong items? If so, you may do the exact same thing no matter what your budget. Or is shopping and buying clothes where you get the pleasure, not actually wearing what you buy?
You could simply take an assessment of what you actually spent all last year, total it, then arbitrarily decide to see if you can live on half of that amount this year?
Finally, I will pass along my dad's advice. He always recommended that the best budgets are based on actuals. He thinks people are very consistent over time. If you have years worth of data, you can test this out. You will probably discover that no matter what your income you were consistent with the percentage you spent on clothes, year after year. Trying to reduce this amount substantially, may be impossible (unless of course you get laid off and simply have no choice).
Insert whatever gives you pleasure in place of "clothes" above and his principle applies.... for example, my dad's always had a passion for cars, ever since he was a teen and worked as a mechanic in a gas station. It may seem frivilous, but his life would be bleak and pleasureless without a cool car or two to tinker around with. Cars for him are not merely about transportation - they are his passion. No matter how little income he had or how much, he consistently spent a percentage of his budget to enjoy that passion.
Hope that helps!
